Emerging Trends in Real Estate Europe 2009

European investors, developers, bankers, and brokers confirm that 2009 is a very difficult year.

Capital for real estate will continue to be in short supply during 2009, in both equity and debt markets and there is real uncertainty as to when this trend will reverse. It is not yet clear whether it is holding off for pricing to improve or whether the reason is more fundamental.

Overwhelmingly, respondents report that it is virtually impossible to get new debt and it will continue to be tough to obtain in 2009. As a result buyers are looking to alternative strategies to keep them in a deal, such as looking for seller financing or talking to the existing lender.

A joint publication by the Urban Land Institute and PricewaterhouseCoopers is a trends and forecast publication now in its sixth edition. The report provides an outlook on European real estate investment and development trends, real estate finance and capital markets, property sectors, metropolitan areas, and other real estate issues.

 Download our report

The report also reveals that the current real estate capital markets crisis could turn into an occupier crisis as Europe slides deeper into recession. Economic growth has continued to decline across Europe in 2008 and this trend will follow into 2009 as European economies continue to struggle in current market conditions. Even the fastest growing countries will face production declines through the year ahead and expectations are that it will feed through into tenant demand and a corresponding increase in vacancies with rents stalling or facing a correction.

Survey respondents ranked Munich top of the investment market league table due to a combination of factors including: an increase in government spending, which may lead to future economic growth; the decline in unemployment; a fast growing population and increased consumer spending power. Munich also came top of the European City Risk league table. Munich is seen as having low risk because of its diverse economic base which mitigates risky investments.

Top 10 investment markets for 2009:
  1. Munich
  2. Hamburg
  3. Istanbul
  4. Zurich
  5. London
  6. Moscow
  7. Helsinki
  8. Paris
  9. Berlin
  10. Frankfurt